Silicon Valley has been disrupted. It appears that technology stocks are spiraling downward and some very heavily funded start-ups are already downsizing and some have even shut down. Yet with all this happening, many unicorn start-ups are dismissing the shifting economic environment claiming to make little or no changes.
Many start-ups are still operating at their usual pace keeping hiring and expansion plans in place. Some even argue that the downturn will have a positive effect, as less venture capital money should lead to fewer competitors and a less crowded market. The message that entrepreneurs should be more careful is often ignored.
On the other hand, the message of being more cautious is not completely lost, as some companies have made careful decisions to cut back and find ways to grow sustainably. Even so, many start-ups may still be over confident that they can make a compelling case on how their product or service will make an incredible impact in the market.
What is the lesson to be learned? As an entrepreneur, a business owner and a management consultant who has experienced the ups and downs of the marketplace many times, I can readily advise that if the warning signs are there, you should pay attention. Take the time to understand the market and make the adjustments that are necessary to keep your business thriving. Focus on making your product or service stand out in the saturated market. Make cuts where you need to, but make investments where you need to as well. The goal is to succeed despite and because of the economy.